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Recently, I've hacked my camera to the Sanity 4.1 patch. It's quality has improved; file sizes are much larger / record time has decreased, but all in all, I'm happy with the results.

My question is: going from .mts file to .mov (prores), do I lose quality? That is to say, if I were able to edit / grade raw files, would I have higher quality results than if I transcode to prores (and ultimately dvcpro). Clearly, downrezing to a 720 frame I lose resolution, but as far as color grading goes, what is the trade off to transcoding to prores and editing / grading in that format?